Question

Corrieten Company purchased equipment and incurred these costs:

Cash price $24,000
Sales Tax 1,200
Installation and testing 400
Insurance during transit 200
Total costs $25,800
What amount should be recorded as the cost of the equipment?
A. $24,000
B. $25,200
C. $25,400
D. $25,800

Answer 1

Answer: D. $25,800

Step-by-step explanation:

Given the following :

Cash price - $24,000

Sales Tax - $1,200

Installation and testing - $400

Insurance during transit - $200

Total price = cash price + sales tax + installation and testing + insurance during transit

Total price = $24,000 + $1,200 + $400 + $200

Toral price = $25,800

Total cost of equipment that should be recorded is $25,800